There are stocks hankering for attention, yet investors continue to steer clear of them. Perhaps the nature of the business is the reason for the unpopularity. Waste Connections Inc. (TSX:WCN)(NYSE:WCN) is one stock many are ignoring. But for intelligent investors, this is the ideal stock to deliver a windfall for the long haul.
People in North America, people should be thankful to this premier provider of solid waste collection, transfer, recycling, and disposal services. Waste Connections protects the environment in the U.S. and Canada as well as the health of their populace. Although unappetizing to many, the business will be around for decades or longer.
Sustainability and growth
For most of the fourth-quarter of 2018, WCN traded above $100.00. In the early trading sessions in January, the price dipped less than a dollar. Since then, the stock gradually climbed to reach its current price of $112.32 and the surge is likely to continue.
On the financial aspect, Waste Connections have solid numbers to show. Both the 2018 fourth quarter and full-year revenue exceeded expectations. For the year ended December 31, 2018, total revenue was US$4.923 billion, or a 6.3% increase from the previous year.
Operating income was US$832.2 million, which included US$40.7 million of impairments and other operating items, fair value accounting changes to certain equity awards, and other acquisition-related costs. In the prior year, the figure was US$627.1 million.
The bottom line, or net income attributable to Waste Connections in 2018 was $546.9 million (US$2.07 per share on a diluted basis of 264.4 million shares) compared to the US$576.8 million in 2017, which included the $205.6 million benefit to the income tax provision primarily related to the Tax Act.
The $29.807 billion company is focused on the future and always prepared to evaluate emerging technologies that could be used to further enhance the environment. Likewise, this environmental services company is open to using alternative technologies to reduce landfill disposal, reduce greenhouse gas emissions and harness bio-fuels.
Waste Connections is projecting a 7.86% growth in revenue, or US$5.310 in 2019. Management sees no material change in the current economic environment. However, the demand for their services will certainly never cease.
No rubbish investment
The objective of stock investors is to make money. You’ll be wasting money when you base your investment decision on popularity. It doesn’t follow that popular stocks are quality stocks. Sometimes it’s wiser to avoid popular stocks. The promised gains are purely speculative, and you might even be snared by hidden traps if you’re reckless.
Waste Connections is far from being a ‘rubbish’ investment. The gains are real and the dividend growth rate is guaranteed. Would you still go with the herd and bet your money on celebrated stocks, or would you rather shift to an enduring business that will remain above water despite market downturns? The answer isn’t hard to predict.